President Donald Trump’s additional tariffs against trade partners was not well received by the stock market. Stocks fell around the world Thursday morning, approximately 1.7 trillion was wiped off from the United States’ S&P 500 as President Trump’s sweeping tariff plan kicked off a trade war with several countries.
The downward spiral at the stock market might be an early indicator of what to expect in the U.S. economy. The stock market showed a fall in major indices, internationally, Japan’s Nikkei closed 2.8% lower and the pan-European Stoxx 600 index was down 1.5% in early trading.
READ: The perils of Trump’s proposed tariff trade war (February 6, 2025)
While in the U.S., the S&P 500 and Nasdaq saw 3% and 3.5% drop. Stocks from the Magnificent 7 were down as well, with Apple reportedly seeing a 7% drop. The U.S. market faced broad turmoil as the benchmark index suffered its steepest drop since 2022. By 9:35 a.m. in New York, nearly 70% of S&P 500 companies were in the red, with almost half plunging 2% or more.
“Markets are going to continue to struggle with the speed at which tariff details change as well as the ultimate result of the tariffs themselves (e.g. the magnitude of the tariffs),” Chris Zaccarelli, chief investment officer at Northlight Asset Management, said in a note.
Many countries at the receiving end of these tariffs have indicated that they will be responding in kind. If these countries raise tariffs against the U.S., it could lead to a decline in American exports, reducing access to international markets for U.S. manufacturers and farmers. This could harm U.S. industries, raise prices for consumers, and potentially trigger a trade war, further disrupting global supply chains and economic stability.
“China firmly opposes this and will take countermeasures to safeguard its own rights and interests,” the Chinese Ministry of Commerce said in a statement on Wednesday.
European Commission President Ursula von der Leyen said the EU is also preparing further countermeasures. She said that they were already finalizing the first package of countermeasures in response to tariffs on steel referring to Trump’s 25% tariffs on steel and aluminium that went into effect last month. These retaliatory tariff hikes could significantly impact U.S. manufacturing, which is counterintuitive to Trump’s plan of promoting domestic manufacturing.
READ: Canada, China, Mexico, South Korea, India among 10 countries to be hit by Trump’s tariffs on aluminum, steel (February 11, 2025)
It is being reported that new tariffs will come into effect from 00:01 a.m. ET (04:01GMT) on April 9 and that about 60 countries will face individualized tariffs, calculated to be roughly half of the tariffs and other barriers that the Trump administration claims they charge the U.S.
Here are some of the important trading partners subject to these customized tariff rates include, China: 54%, India: 26%, Japan: 24%, and the European Union: 20%.